Feds Take Lead on Health Insurance Exchanges

FRIDAY, March 8 (HealthDay News) -- More than half the states in
the nation have decided to let the federal government take on the
task of creating one of the most complex yet vital parts of the
massive 2010 health reform law, which was championed by President
Barack Obama.

In 26 states, the federal government will set up so-called
health insurance exchanges, where many Americans can shop for
coverage beginning with open enrollment this October. Most of the
states handing off exchange duties to Washington are led by
Republican governors, including heavily populated states like
Florida and Texas.

Only 17 states and the District of Columbia plan to create and
run their own exchanges, and the remaining seven states will do it
in partnership with the federal government, according to the Henry
J. Kaiser Family Foundation's latest count.

Colorado, one of the first states to enact health exchange
legislation, expects to cover 300,000 uninsured residents through
its state-run exchange, Connect for Health Colorado.

"I think we feel strongly that we have certain opportunities and challenges that we understand best, and so it does make sense for us to create a system that really is going to work for the stakeholders in Colorado," said Dede de Percin, executive director of the Colorado Consumer Health Initiative in Denver.

Some states had placed exchange-building on the back burner as
they awaited last June's U.S. Supreme Court decision on the
constitutionality of the health reform law, as well as the outcome
of the November presidential election.

Republican Gov. Paul LePage of Maine was among those who, in the
wake of President Obama's reelection, decided not to implement a
state exchange.

Maine has an estimated 133,000 uninsured people, a number that
may swell by as many as 44,000, according to Joseph Ditre,
executive director of Consumers for Affordable Health Care in
Augusta.

"We are hopeful that the [federally facilitated exchange] will enable a vigorous outreach and enrollment campaign," Ditre said. Still, he added that Maine's decision to forgo a state-run exchange means the state won't play an active role in negotiating with health plans to keep rates down and improve quality -- at least not immediately.

White House says exchanges will be ready by Oct. 1

State-based health insurance exchanges are one of the mainstays
of the Affordable Care Act, also known as "Obamacare," for
expanding access to health insurance coverage. An estimated 25
million people are expected to gain health coverage through the
exchanges by 2022, substantially slashing the ranks of the nation's
48.8 million uninsured.

The exchanges are intended to serve as a virtual "marketplace,"
where consumers and small businesses can access online health plan
descriptions and data on quality and consumer satisfaction. All
exchanges must have a toll-free hotline that people can call to get
their coverage questions answered, and trained "navigators" to
assist with the enrollment process.

About 18 million people with incomes up to 400 percent of the
federal poverty level ($45,960 for an individual and $94,200 for a
family of four) may qualify for premium assistance through the
exchanges, according to the Families USA website.

To encourage greater state involvement in the exchanges, the
federal government had proposed partnering with states to get the
job done, but that option lacked broad appeal. Only four additional
states -- Iowa, Michigan, New Hampshire and West Virginia --
applied for a partnership by the Feb. 15 deadline.

On March 7, the U.S. Department of Health and Human Services
(HHS) conditionally approved those four partnerships. Earlier, HHS
had conditionally approved partnerships with three states:
Arkansas, Delaware and Illinois.

New Jersey is one state that nixed a state-federal partnership,
opting instead for a federally run exchange. In a letter to HHS
Secretary Kathleen Sebelius, Republican Gov. Chris Christie said
his state was committed to complying with the Affordable Care Act,
"but only in a manner that is the most efficient and effective for
the residents of New Jersey and the businesses that will carry the
costs of this new program." He concluded that "federal operation of
the exchange is the most responsible choice" for the state.

Despite the task ahead, the Obama administration insists that it
will get the exchanges up and running by Oct. 1.

"No matter where a qualified consumer lives, he or she will have access to coverage through a marketplace," Sebelius said in a recent blog post.

State vs. federal exchange

Consumers looking to buy coverage through that marketplace may
not be able to tell whether it's a state or federal effort.

"I think it will look like a state exchange to anyone. They won't necessarily know," said Sonya Schwartz, project director of State Refor(u)m, an online network for health reform implementation developed by the National Academy for State Health Policy in Washington, D.C.

There will be clear distinctions, though. Some state exchanges
have adopted an "active purchaser" model, meaning they will limit
consumer choices to health plans offering the best value. The
federally facilitated exchanges, by contrast, will include all
qualified health plans in a state.

"The other thing is, I think that consumers do probably have a better chance of getting their complaints or problems addressed in state-exchange states," Schwartz said. In states with federally facilitated exchanges, she explained, "people will still go to their state officials, and officials won't really know how they can help, necessarily."

State-run exchanges may also have a leg up when it comes to
spreading the word to people who need health insurance.
"Everybody's going to have to be engaged in reaching those people
and educating them," de Percin said.

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